Lack of savings to scupper grand retirement plans

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Babyboomers appear to have grand retirement plans, but the reality of their financial situations means they could be in for a rude awakening.

Britons aged 55 and over are keen to travel the world, enhance their social life and improve their health and fitness when they finish working, but research conducted by Aviva suggests they are not making sufficient savings to do so.

More than four in ten (43%) babyboomers said they viewed their retirement as the start of an exciting new stage of their life, with many looking to sun themselves abroad or start a health kick.

Other plans include making money from hobbies and spending more time with their families.

Most of these plans could be pie in the sky, however, as many babyboomers have not taken the necessary steps to building up a pension pot that would allow them to enjoy their dream retirement.

Over half of over 55s who currently earn between £20,000 and £30,000 have put away less than £30,000 for their retirement.

This level of saving translates to an income in retirement of around £165 per month. But, despite this, almost a quarter of people (23%) in this category anticipate a 'comfortable' retirement.

Clive Bolton, 'at retirement' director for Aviva said: "Babyboomers have enjoyed certain benefits such as rising house prices and final salary pension schemes, but unfortunately many may still struggle to fund the retirement lifestyle they desire.

"In the run up to retirement, people should think about how they want to spend their days, and in reality, how much this will cost.

"Regardless of what pension pots people have, turning them into a viable income is vital, so shopping around for an annuity is an important next step."